Retail facility location under changing market conditions

Retail facility location under changing market conditions

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Article ID: iaor20073541
Country: United Kingdom
Volume: 13
Issue: 4
Start Page Number: 283
End Page Number: 302
Publication Date: Oct 2002
Journal: IMA Journal of Management Mathematics (Print)
Authors: ,
Keywords: retailing, probability
Abstract:

In this paper we investigate the location of retail facilities under changing market conditions when market conditions are expected to change during the planning horizon. Three models are presented: (1) the minimax regret model where the objective function is to minimize the maximum possible loss under different market scenarios, (2) the Stackelberg equilibrium model whereby a future competitor enters the market and one wishes to maximize the market share captured throughout the planning horizon incorporating the market share loss to the competitor, and (3) the threshold model in which we consider a minimum threshold level such that if the market share captured by the new facility fails to reach that threshold, the facility will not survive. Our objective is to minimize the probability of failure.

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